S&P500 dropped 0.6% and Nasdaq 0.8% as risk appetite faded following several days of strong gains as Apple and chip stocks dropped and as a result an inflation scare which hit bond markets for a second day on soaring commodity prices. Techs showed mixed performance and our Confidometer is healing still. US 10-year Treasury yield reached 2.93%, just 2bps shy of 2018 highs seen in February and the breakeven rate signaled by 10y inflation-linked Treasuries rose to 2.19%, the highest since 2014. German 10y Bund yields added 10bps in 2 days reaching 0.60%. All bond segments of our investment universe populated the bottom of our z-score report (trading nearly 3 sigmas below their 20dma), suggesting strong selling pressure and breakdown conditions while silver, nickel and cocoa populated the top.
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BentinPartner Advisers, Basel
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